ARLINGTON, Va., Aug. 6 /PRNewswire-FirstCall/ -- Interstate Hotels
& Resorts (NYSE:IHR), a leading hotel real estate investor and
the nation's largest independent operator of full and
select-service hotels, today reported operating results for the
second quarter ended June 30, 2008. The company's performance for
the second quarter includes the following (in millions, except per
share amounts): Second Quarter Year-to-Date (YTD) -----------------
------------------ 2008 2007(4) 2008(4) 2007(4) ----- -------
------- ------- Total revenue (1) $40.5 $35.4 $79.4 $63.8 Net
income (loss) $0.1 $(0.6) $(0.2) $15.3 Diluted earnings (loss) per
share $0.00 $(0.02) $0.00 $0.48 Adjusted EBITDA (2) (3) $10.2 $9.5
$17.9 $16.4 Adjusted net income (loss) (2) $0.1 $1.9 $(1.0) $2.7
Adjusted diluted EPS (2) $0.00 $0.06 $(0.03) $0.09 (1) Total
revenue excludes other revenue from managed properties
(reimbursable costs). (2) Adjusted EBITDA, Adjusted net income, and
Adjusted diluted EPS are non-GAAP financial measures and should not
be considered as an alternative to any measures of operating
results under GAAP. See the definition of and further discussion of
non-GAAP financial measures and reconciliation to net income later
in this press release. (3) Includes the company's share of EBITDA
from unconsolidated joint venture investments in the amounts of
$2.5 million and $1.0 million in the second quarters of 2008 and
2007, respectively, and $4.2 million and $1.9 million in the first
six months of 2008 and 2007, respectively. (4) The YTD 2008 results
include (i) a $2.4 million gain on the sale of the Doral Tesoro
Hotel & Golf Club, and (ii) $1.1 million of write- offs of
intangible assets related to the sale of certain hotels. The 2007
results include (i) $5.5 million and $7.9 million of write-offs of
intangible assets related to the sale of certain hotels during the
second quarter 2007 and YTD, respectively, and (ii) a $17.6 million
gain related to the sale of BridgeStreet Corporate Housing
(completed in the first quarter 2007), which along with the
operations through the date of sale, are included in Income from
Discontinued Operations on the company's statement of operations
for the first quarter 2007. All of these items have been excluded
from the calculation of Adjusted EBITDA, Adjusted net income, and
Adjusted diluted EPS. In addition, the 2007 results have been
restated as presented in the company's 2007 Annual Report on form
10-K. For further details on this restatement see footnote 13 to
the financial tables of this press release, as well as footnote 19
in our 2007 Annual Report on form 10-K. Highlights for the second
quarter include: -- RevPAR rose 4.0 percent for all managed hotel
properties, compared to an average industry gain of 1.2 percent; --
Added nine management contracts, representing the third consecutive
quarter of higher unit count; -- Signed a contract to manage its
first property in India, an under- construction hotel in Vizag
(Visakhapatnam) through India JV; -- Opened first U.S. Starwood
branded aloft Hotel, in Rancho Cucamonga, Calif., developed and
co-owned with JV partner, The John Buck Company; -- Signed
contracts to manage company's first Cambria Suites, to be built
near Atlanta Hartsfield Airport, to open in Q1 2009, and Crowne
Plaza New Orleans, to open in Q4 2008. Wholly Owned Hotel Results
EBITDA from the company's seven owned hotels was $8.3 million in
the 2008 second quarter and $15.3 million for the first six months
as outlined below (in millions): Owned Hotels Second Quarter
Year-to-Date --------------------------------------------------
-------------- 2008 2007 2008 2007 ---- ---- ---- ---- Net income
$1.4 $1.3 $1.7 $1.7 Interest expense 3.1 2.9 6.6 4.9 Depreciation
and amortization 3.8 1.8 7.0 3.2 ---- ---- ----- ---- EBITDA $8.3
$6.0 $15.3 $9.8 ==== ==== ===== ==== "RevPAR rose 2.9 percent for
the owned portfolio, excluding results at the Westin Atlanta
Airport and Sheraton Columbia, Md. properties, where the hotels
continue to operate under major renovations," said Thomas F.
Hewitt, chief executive officer. "Hilton Houston Westchase and
Hilton Concord reported the strongest results, both achieving
RevPAR increases of approximately 5 percent. Hewitt noted that
renovations at the Atlanta and Columbia, Md. hotels are proceeding
on budget and on schedule. "At the Sheraton Columbia in Maryland,
we completed the first phase of the rooms renovation in late April,
which comprised 50 percent of the 288 guest rooms. We began the
second phase earlier this month, which we expect to finish by the
end of the third quarter. The majority of the remaining projects in
the capital plan, including all remaining public spaces, will be
completed by the end of the year. "We recently completed the rooms
renovation at the Westin Atlanta Airport, and are on schedule to
finish the remaining upgrades to the meeting rooms and public
spaces by year end. With the completion of the Westin's $18 million
renovation and the $12 million renovation at the Sheraton Columbia,
these properties will be well positioned to achieve their full
operating potential. "As we entered the year, we did anticipate a
certain amount of displacement from our renovations," Hewitt noted.
"However, the impact of disruption associated with renovations of
this magnitude coupled with a weaker economic environment will
significantly affect the performance of these hotels in 2008. As a
result, we are decreasing our full-year forecasted EBITDA from our
wholly owned hotels by $2.5 million. The remainder of our owned
hotel portfolio has performed well, with four of the five hotels
exceeding our year- to-date budget. "While our current forecast
reflects a greater disruption impact from the renovations than
originally anticipated, these hotels represent significant embedded
growth for us in 2009 and beyond," Hewitt said. "In 2009 alone, we
anticipate a $4.5 to $5 million increase in EBITDA from these two
hotels." Joint Venture Investments During the quarter, the company
opened the first aloft Hotel in the U.S., in Rancho Cucamonga,
Calif., near Ontario. The 136-room, newly built hotel is owned by a
joint venture in which Interstate and The John Buck Company (TJBC)
of Chicago, Ill., a real estate development firm, are partners.
"The aloft Ontario-Rancho Cucamonga is part of our growth strategy
to develop hotels through joint ventures, which translates into
significant growth potential as they ramp up," Hewitt said. "We
expect this brand to quickly gain broad market acceptance and
achieve strong operating margins." Last week, the company announced
a joint venture partnership with Madison W Properties, LLC, which
recapitalized the existing ownership of the Lexington Downtown
Hotel & Conference Center, formerly the Radisson, and an
adjacent office building located in downtown Lexington, Ky. The
partnership will invest $13 million in capital improvements and
convert the property to the Hilton brand in 2009. Interstate
managed the property for affiliates of the Blackstone Group prior
to the transaction. Leslie Ng, Interstate's chief investment
officer, added that joint venture investments remain an essential
part of the company's real estate growth strategy in 2008. "With
the addition of the Lexington property, we currently have an equity
interest in 49 properties. This will increase in the third quarter
with the scheduled opening of the aloft Cool Springs, Tenn. We
continue to seek joint venture opportunities both internationally
and domestically that are consistent with our targeted investment
profile." Hotel Management Results Same-store(5) RevPAR for all
managed hotels in the second quarter of 2008 increased 4.0 percent
to $108.65. Average daily rate (ADR) advanced 5.6 percent to
$143.13, and occupancy declined 1.6 percent to 75.9 percent.
Same-store RevPAR for all full-service managed hotels rose 4.1
percent to $118.61. ADR improved 6.5 percent to $155.53, while
occupancy dropped 2.2 percent to 76.3 percent. Same-store RevPAR
for all select-service managed hotels increased 3.7 percent to
$83.58, led by a 3.3 percent gain in ADR to $111.42, and a 0.4
percent increase in occupancy to 75.0 percent. "Our overall RevPAR
increase of 4.0 percent for the quarter was well ahead of the
industry RevPAR gain of 1.2 percent," Hewitt said. "Our RevPAR for
the period was driven solely by room rate, as occupancy declined
1.6 percent. Although group business has held up relatively well,
we are seeing more softness in our discretionary leisure/transient
business, which is more sensitive to the difficult economic
climate. This has led us to decrease our full-year RevPAR forecast
to 1 to 3 percent growth, which remains ahead of overall industry
expectations. "As you would expect with lower RevPAR assumptions,
we have implemented various cost containment initiatives at the
majority of our hotels in order to maintain operating margins," he
added. "Year to date, across the portfolio, we achieved very strong
gross operating profit margins, 70 basis points higher than last
year. Our sales and operations personnel have weathered numerous
economic downturns and capitalize on this experience to achieve
maximum operating results for our owners." "We were particularly
pleased to report our third consecutive quarter of unit growth, as
we added a total of nine management contracts during the quarter,"
Hewitt said. After the end of the quarter, the company announced
that it has taken over management of four Hyatt Place hotels for
FFC Capital Corp. In addition, later this month the company will
open the Hilton Garden Inn Melville, a newly constructed hotel in
New York. "Today, we have 16 management contracts for hotels under
development or construction. These, together with the two
properties that have opened this year, represent significant
embedded growth in 2009 and beyond," Hewitt said. "Including the
properties opening in 2008 and 2009, the company expects to earn
approximately $3.5 million of incremental management fees in 2009."
(5) Please see footnote 6 to the financial tables within this press
release for a detailed explanation of "same-store" hotel operating
statistics. International Expansion The company continued to expand
its international presence in the second quarter. In April, JHM
Interstate Hotels India, Interstate's joint venture management
company with JHM Hotels, signed an agreement to manage its first
property in India. The five-star, business-class hotel in Vizag
(Visakhapatnam) is on schedule to open in late 2008. Interstate and
its joint venture partner also simultaneously invested in a
U.K.-based real estate fund dedicated solely to hotel investment in
India, with a goal of developing approximately 25 hotels there. In
the third quarter, Interstate will open and manage the 273-room
Hilton Moscow Leningradskaya in Russia. The landmark hotel, which
recently completed a two-year total comprehensive restoration and
modernization program, will be the first Hilton branded hotel in
Moscow. It will be Interstate's sixth managed property in Moscow
and eighth in Europe. Hewitt added that the 300-room Renaissance
Hotel in Moscow is scheduled to open in early 2009. "With this
opening, we will manage a total of seven hotels in Moscow. The
Russian economy remains robust, and we continue to source
additional opportunities through our extensive contacts there." In
Latin America, the company's joint venture management company, IHR
de Mexico, is actively engaged in pursuing contracts throughout
Mexico and Central America. Balance Sheet On June 30, 2008,
Interstate had: -- Total unrestricted cash of $8.3 million. --
Total debt of $229.8 million, consisting of $147.3 million of
senior debt and $82.5 million of non-recourse mortgage debt. On May
1, the company closed on a $25 million non-recourse mortgage
secured by its Sheraton Columbia hotel. The loan can be increased
up to $35 million in total upon achieving certain capital
expenditure and net operating income thresholds. Outlook and
Guidance The company provides the following updated guidance for
full-year 2008: -- RevPAR, on a same-store basis, as follows: --
RevPAR for all managed properties (including owned hotels) is
expected to increase 1.0 percent to 3.0 percent; -- Owned Hotel
RevPAR, excluding Westin Atlanta Airport and Sheraton Columbia
hotels (which are undergoing significant renovations), is expected
to increase 1.0 percent to 3.0 percent; -- Net income of $9.1
million to $10.5 million; -- Diluted earnings per share of $0.28 to
$0.32; -- Adjusted net income of $8.3 million to $9.7 million; --
Adjusted diluted earnings per share of $0.25 to $0.29; -- Adjusted
EBITDA of $50.5 million to $52.5 million, which includes the
following: -- EBITDA from wholly owned hotels of $26.5 million to
$27.5 million; -- The company's share of EBITDA from unconsolidated
joint ventures of approximately $8.5 million; -- EBITDA from the
hotel management business of $15.5 million to $16.5 million; -- The
company's share of joint venture debt of $70 million related to
existing joint ventures. Interstate will hold a conference call to
discuss its second-quarter results today, August 6, at 10 a.m.
Eastern Time. To hear the webcast, interested parties may visit the
company's Web site at http://www.ihrco.com/ and click on Investor
Relations and then Second-Quarter Conference Call. A replay of the
conference call will be available until midnight on Wednesday,
August 13, 2008, by dialing (800) 405-2236, reference number
11117346, and an archived webcast of the conference call will be
posted on the company's Web site through September 6, 2008. As of
today, Interstate Hotels & Resorts has ownership interests in
56 hotels and resorts, including seven wholly owned assets.
Together with these properties, the company and its affiliates
managed a total of 223 hospitality properties with approximately
46,000 rooms in 36 states, the District of Columbia, Russia,
Mexico, Canada, Belgium and Ireland. Interstate Hotels &
Resorts also has contracts to manage 16 to be built hospitality
properties with approximately 3,800 rooms. For more information
about Interstate Hotels & Resorts, visit the company's Web
site: http://www.ihrco.com/. Non-GAAP Financial Measures Included
in this press release are certain non-GAAP financial measures,
which are measures of our historical or estimated future
performance that are different from measures calculated and
presented in accordance with generally accepted accounting
principles in the United States of America (or GAAP), within the
meaning of applicable Securities and Exchange Commission rules,
that we believe are useful to investors. They are as follows: (i)
Earnings before interest, taxes, depreciation and amortization (or
"EBITDA") and (ii) Adjusted EBITDA, Adjusted net income, and
Adjusted diluted EPS. The following discussion defines these terms
and presents the reasons we believe they are useful measures of our
performance. EBITDA A significant portion of our non-current assets
consists of intangible assets, related to some of our management
contracts, and long lived assets, which includes the cost of our
owned hotels. Intangible assets, excluding goodwill, are amortized
over their expected term. Property and equipment is depreciated
over its useful life. Because amortization and depreciation are
non-cash items, management and many industry investors believe the
presentation of EBITDA is useful. We also exclude depreciation and
amortization and interest expense from our unconsolidated joint
ventures. We believe EBITDA provides useful information to
investors regarding our performance and our capacity to incur and
service debt, fund capital expenditures and expand our business.
Management uses EBITDA to evaluate property-level results and as
one measure in determining the value of acquisitions and
dispositions. It is also widely used by management in the annual
budget process. We believe that the rating agencies and a number of
lenders use EBITDA for those purposes and a number of restrictive
covenants related to our indebtedness use measures similar to
EBITDA presented herein. Adjusted EBITDA, Adjusted Net Income and
Adjusted Diluted EPS We define Adjusted EBITDA as, EBITDA,
excluding the effects of certain recurring and non-recurring
charges, transactions and expenses incurred in connection with
events management believes do not provide the best indication of
our ongoing operating performance. These charges include
restructuring and severance expenses, asset impairments and
write-offs, gains and losses on asset dispositions for both
consolidated and unconsolidated investments, and other non-cash
charges. We believe that the presentation of Adjusted EBITDA will
provide useful supplemental information to investors regarding our
ongoing operating performance and that the presentation of Adjusted
EBITDA, when combined with the primary GAAP presentation of net
income, is beneficial to an investor's complete understanding of
our operating performance. We also use Adjusted EBITDA in
determining our incentive compensation for management. Similarly,
we define Adjusted net income (loss) and Adjusted diluted earnings
(loss) per share ("EPS") as net income and diluted EPS, without the
effects of those same charges, transactions and expenses described
earlier. We believe that Adjusted EBITDA, Adjusted net income and
Adjusted diluted EPS are useful performance measures because
including these expenses, transactions, and special charges may
either mask or exaggerate trends in our ongoing operating
performance. Furthermore, performance measures that include these
charges may not be indicative of the continuing performance of our
underlying business. Therefore, we present Adjusted EBITDA,
Adjusted net income and Adjusted diluted EPS because they may help
investors to compare our performance before the effect of various
items that do not directly affect our ongoing operating
performance. Limitations on the use of EBITDA, Adjusted EBITDA and
Adjusted Net Income We calculate EBITDA, Adjusted EBITDA, Adjusted
net income, and Adjusted diluted EPS as we believe they are
important measures for our management's and our investors'
understanding of our operations. These may not be comparable to
measures with similar titles as calculated by other companies. This
information should not be considered as an alternative to net
income, operating profit, cash from operations or any other
operating performance measure calculated in accordance with GAAP.
Cash receipts and expenditures from investments, interest expense
and other non-cash items have been and will be incurred and are not
reflected in the EBITDA and Adjusted EBITDA presentations. Adjusted
net income and Adjusted diluted EPS do not include cash receipts
and expenditures related to those same items and charges discussed
above. Management compensates for these limitations by separately
considering these excluded items, all of which should be considered
when evaluating our performance, as well as the usefulness of our
non-GAAP financial measures. Additionally, EBITDA, Adjusted EBITDA,
Adjusted net income, and Adjusted diluted EPS should not be
considered a measure of our liquidity. Adjusted net income and
Adjusted diluted EPS should also not be used as a measure of
amounts that accrue directly to our stockholders' benefit. This
press release contains "forward-looking statements," within the
meaning of the Private Securities Litigation Reform Act of 1995,
about Interstate Hotels & Resorts, including those statements
regarding future operating results and the timing and composition
of revenues, among others, and statements containing words such as
"expects," "believes" or "will," which indicate that those
statements are forward-looking. Except for historical information,
the matters discussed in this press release are forward-looking
statements that are subject to certain risks and uncertainties that
could cause the actual results to differ materially, including the
volatility of the national economy, economic conditions generally
and the hotel and real estate markets specifically, the war in
Iraq, international and geopolitical difficulties or health
concerns, governmental actions, legislative and regulatory changes,
availability of debt and equity capital, interest rates,
competition, weather conditions or natural disasters, supply and
demand for lodging facilities in our current and proposed market
areas, and the company's ability to manage integration and growth.
Additional risks are discussed in Interstate Hotels & Resorts'
filings with the Securities and Exchange Commission, including
Interstate Hotels & Resorts' annual report on Form 10-K for the
year ended December 31, 2007. Contact: Carrie McIntyre SVP,
Treasurer (703) 387-3320 Interstate Hotels & Resorts, Inc.
Statements of Operations (Unaudited, in thousands except per share
amounts) Three Months Ended Six Months Ended June 30, June 30,
------------------ ------------------- 2008 2007 (13) 2008 2007
(13) ------- --------- ------- --------- (as restated) (as
restated) Revenue: Lodging $25,796 $18,621 $49,714 $31,697
Management fees 10,820 11,580 20,729 23,049 Termination fees (1)
1,194 2,418 4,204 3,993 Other 2,693 2,763 4,792 5,032 -------
-------- ------- --------- 40,503 35,382 79,439 63,771 Other
revenue from managed properties 157,333 164,793 308,347 341,163
------- -------- ------- --------- Total revenue 197,836 200,175
387,786 404,934 Expenses: Lodging 17,510 12,607 34,452 21,930
Administrative and general 15,331 14,635 31,243 27,999 Depreciation
and amortization 4,901 3,423 9,175 6,648 Asset impairments and
write-offs (2) 29 5,513 1,141 7,912 ------- -------- -------
--------- 37,771 36,178 76,011 64,489 Other expenses from managed
properties 157,333 164,793 308,347 341,163 ------- -------- -------
--------- Total operating expenses 195,104 200,971 384,358 405,652
------- -------- ------- --------- OPERATING INCOME (LOSS) 2,732
(796) 3,428 (718) Interest income 280 721 599 1,157 Interest
expense (3) (3,333) (3,276) (7,148) (6,009) Equity in earnings of
unconsolidated entities 535 854 2,896 1,255 -------- --------
------- -------- INCOME (LOSS) BEFORE MINORITY INTEREST AND INCOME
TAXES 214 (2,497) (225) (4,315) Income tax (expense) benefit (79)
1,275 72 2,056 Minority interest (expense) benefit (1) 4 1 (42)
-------- -------- ------- -------- INCOME (LOSS) FROM CONTINUING
OPERATIONS 134 (1,218) (152) (2,301) Income from discontinued
operations, net of tax (4) - 607 - 17,608 -------- -------- -------
-------- NET INCOME (LOSS) $134 $(611) $(152) $15,307 ========
======== ======= ======== BASIC (LOSS) EARNINGS PER SHARE:
Continuing operations $0.00 $(0.04) $0.00 $(0.08) Discontinued
operations 0.00 0.02 0.00 0.56 -------- -------- ------- --------
Basic (loss) earnings per share $0.00 $(0.02) $0.00 $0.48 ========
======== ======= ======== DILUTED (LOSS) EARNINGS PER SHARE (5):
Continuing operations $0.00 $(0.04) $0.00 $(0.08) Discontinued
operations 0.00 0.02 0.00 0.56 -------- -------- ------- --------
Diluted (loss) earnings per share $0.00 $(0.02) $0.00 $0.48
======== ======== ======= ======== Weighted average shares
outstanding (in thousands): Basic 31,764 31,642 31,765 31,602
Diluted 32,864 31,642 31,765 31,894 Interstate Hotels &
Resorts, Inc. Hotel Level Operating Statistics (Unaudited) Three
Months Ended Six Months Ended June 30, June 30,
---------------------- ---------------------- % % 2008 2007 change
2008 2007 change ----- ------- ------ ------ ------- ------ Managed
Hotels - Hotel Level Operating Statistics: (6) Full-service hotels:
Occupancy 76.3% 78.0% -2.2% 73.5% 75.8% -3.0% ADR $155.53 $145.99
6.5% $152.97 $142.93 7.0% RevPAR $118.61 $113.91 4.1% $112.44
$108.27 3.9% Select-service hotels: Occupancy 75.0% 74.7% 0.4%
71.2% 71.4% -0.3% ADR $111.42 $107.90 3.3% $110.77 $106.59 3.9%
RevPAR $83.58 $80.62 3.7% $78.82 $76.13 3.5% Total: Occupancy 75.9%
77.1% -1.6% 72.8% 74.5% -2.3% ADR $143.13 $135.49 5.6% $141.20
$132.98 6.2% RevPAR $108.65 $104.44 4.0% $102.84 $99.10 3.8% Owned
Hotels - Hotel Level Operating Statistics: (7) Occupancy 75.1%
74.6% 0.7% 71.0% 71.9% -1.3% ADR $126.20 $123.43 2.2% $125.65
$121.70 3.2% RevPAR $94.74 $92.06 2.9% $89.23 $87.56 1.9%
Interstate Hotels & Resorts, Inc. Reconciliations of Non-GAAP
Financial Measures (8) (Unaudited, in thousands except per share
amounts) Three Months Six Months Ended Ended June 30, June 30,
---------------- ----------------- 2008 2007 2008 2007 -------
------- -------- -------- Net income (loss) $134 $(611) $(152)
$15,307 Adjustments: Depreciation and amortization 4,901 3,423
9,175 6,648 Interest expense, net 3,053 2,555 6,549 4,852
Depreciation and amortization from unconsolidated joint ventures
1,098 269 1,799 518 Interest expense, net from unconsolidated joint
ventures 897 391 1,860 769 Discontinued operations, net (4) - (607)
- (17,608) Income tax expense (benefit) 79 (1,275) (72) (2,056)
------- ------- -------- -------- EBITDA 10,162 4,145 19,159 8,430
Asset impairments and write-offs (2) 29 5,513 1,141 7,912 Severance
(9) 6 378 6 732 Equity interest in the sale of unconsolidated
entities (10) - (558) (2,392) (686) Minority interest expense
(benefit) 1 (4) (1) 42 ------- ------- -------- -------- Adjusted
EBITDA $10,198 $9,474 $17,913 $16,430 ======= ======= ========
======== Three Months Six Months Ended Ended June 31, June 31,
---------------- ----------------- 2008 2007 2008 2007 -------
------- -------- -------- Net income (loss) $134 $(611) $(152)
$15,307 Adjustments: Asset impairments and write-offs (2) 29 5,513
1,141 7,912 Severance (9) 6 378 6 732 Discontinued operations, net
(4) - (607) - (17,608) Deferred financing costs write-off (3) - 102
- 632 Equity interest in the sale of unconsolidated entities (10) -
(558) (2,392) (686) Minority interest - (14) 6 28 Income tax rate
adjustment (11) (43) (2,255) 397 (3,594) ------- ------- --------
-------- Adjusted net income (loss) $126 $1,948 $(994) $2,723
======= ======= ======== ======== Adjusted diluted earnings per
share $0.00 $0.06 $(0.03) $0.09 ======= ======= ======== ========
Weighted average number of diluted shares outstanding (in
thousands) (5): 32,864 31,642 31,765 31,894 Interstate Hotels &
Resorts, Inc. Outlook Reconciliation (8), (12) (Unaudited, in
thousands) Forecast ----------------- Year Ending December 31, 2008
----------------- Net income $9,800 Adjustments: Depreciation and
amortization 18,400 Interest expense, net 12,700 Depreciation and
amortization from unconsolidated joint ventures 3,200 Interest
expense, net from unconsolidated joint ventures 4,000 Income tax
expense 4,650 ------------------ EBITDA 52,750 Asset impairments
and write-offs (2) 1,150 Equity interest in the sale of
unconsolidated joint ventures (10) (2,400) Minority interest
expense - ------------------ Adjusted EBITDA $51,500
================== Forecast ------------------ Year Ending December
31, 2008 ------------------ Net income $9,800 Adjustments: Asset
impairments and write-offs (2) 1,150 Equity interest in the sale of
unconsolidated joint ventures (10) (2,400) Minority Interest -
Income tax rate adjustment (11) 450 ------------------ Adjusted net
income $9,000 ================== Adjusted diluted earnings per
share $0.27 ================== Interstate Hotels & Resorts,
Inc. Notes to Financial Tables (Unaudited) (1) We record
termination fees as revenue when all contingencies related to the
termination fees have been removed. (2) This amount represents
losses recorded for intangible costs associated with terminated
management contracts and other asset impairments. (3) For 2007,
interest expense includes $0.5 million of deferred financing fees
expensed in the first quarter in connection with the entrance into
a new senior secured credit facility and the related pay-off of all
balances outstanding under our old senior secured credit facility,
as well as the write-off of $0.1 million of deferred financing fees
at the time of repayment of the underlying mortgage note for the
Hilton Concord. (4) In January 2007, we completed the sale of our
subsidiary, BridgeStreet Corporate Housing. We have presented these
operations and the gain on sale as discontinued operations for all
periods presented. The calculation of EBITDA reflects the
elimination of discontinued operations. (5) Our diluted earnings
per share assumes the issuance of common stock for all potentially
dilutive common stock equivalents outstanding. Potentially dilutive
shares include unvested restricted stock and stock options granted
under our comprehensive stock plan and operating partnership units
held by minority partners. No effect is shown for any securities
that are anti-dilutive. (6) We present certain operating statistics
(i.e. occupancy, RevPAR and ADR) for the periods included in this
report on a same-store hotel basis. We define our same-store hotels
as those which (i) are managed by us for the entirety of the
reporting periods being compared or have been managed by us for
part of the reporting periods compared and we have been able to
obtain operating statistics for the period of time in which we did
not manage the hotel, and (ii) have not sustained substantial
property damage, business interruption, or undergone large-scale
capital projects during the reporting periods being presented. In
addition, the operating results of hotels which we no longer
managed as of June 30, 2008 are also not included in same-store
hotel results for the periods presented herein. Of the 221
properties that we managed as of June 30, 2008, 173 hotels have
been classified as same-store hotels. RevPar is defined as revenue
per available room. (7) Owned Hotels - Hotel Level Operating
Statistics include periods prior to our ownership. Houston
Westchase was purchased in February 2007, Westin Atlanta Airport
was purchased in May 2007, Sheraton Columbia hotel was purchased in
November 2007. The Westin Atlanta Airport and Sheraton Columbia
hotels are excluded from these statistics as they are undergoing
significant renovations. Statistics for all owned properties are
included in the Managed Hotels - Hotel Level Operating Statistics.
(8) See discussion of EBITDA, adjusted EBITDA, adjusted net income
and adjusted diluted earnings per share, located in the "Non-GAAP
Financial Measures" section, described earlier in this press
release. (9) Severance expense for the three and six months ended
June 30, 2007 relates to the separation costs of personnel at our
corporate offices associated with the reduction in the number of
third party managed properties. These severance costs are recorded
as part of administrative and general expenses on our statement of
operations. (10) In the first quarter of 2008, one of our joint
ventures sold the Doral Tesoro Hotel & Golf Club, we recorded a
gain of $2.4 million, including the previously deferred gain of
$0.6 million. In 2007, the adjustment relates to an additional gain
of $0.1 million on the sale of the MIP joint venture in the first
quarter, and additional gain proceeds of $0.6 million from the sale
of the Marriott Sawgrass joint venture received during the second
quarter. (11) This amount represents the effect on income tax
expense for the adjustments made to net income at an effective tax
rate of 32.0% for 2008 and 41.7% for 2007. (12) Our outlook
reconciliation uses the mid-point of our estimates. (13) The effect
of the restatement on the consolidated statement of operations for
the three months ended June 30, 2007 was a decrease in amortization
expense of $0.3 million, resulting from incorrectly recognizing
amortization expense for the terminated management contracts, an
increase of $4.5 million in asset impairment and write-offs for the
write-off of the intangible assets related to the terminated hotel
management contracts, and a decrease in income tax expense of $2.0
million. The effect on minority interest on the statement of
operations was immaterial. The effect of the restatement on the
consolidated statement of operations for the six months ended June
30, 2007 was a decrease in amortization expense of $0.3 million, an
increase of $6.8 million in asset impairment and write- offs, a
decrease in income tax expense of $2.9 million, and a decrease in
minority interest expense of $0.2 million. DATASOURCE: Interstate
Hotels & Resorts CONTACT: Carrie McIntyre, SVP, Treasurer of
Interstate Hotels & Resorts, +1-703-387-3320 Web site:
http://www.ihrco.com/
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Interstate Hotels (NYSE:IHR)
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Interstate Hotels (NYSE:IHR)
過去 株価チャート
から 7 2023 まで 7 2024